Intermodal Expo / TransComp Exhibition

For majority of the unorganised players in the logistics sector, outsourcing is constrained due to small scale or decentralised and non-automated operations. The larger players are increasingly streamlining and standardizing their internal processes. Currently, very few Indian companies are in a position to separate out individual processes that can be outsourced. With enterprise wide IT systems deployment, the outsource ability of activities is expected to increase, said ValueNotes in a study.

Presently, the low level of outsourcing in logistics sector is primarily due to low sector maturity. Other restraints for outsourcing are the fragmented market, lack of systems and processes, and resistance to outsourcing. As the logistics sector matures, outsourcing potential will be largely determined by the maturity of outsourcing service providers and their ability to build and develop innovative outsourcing solutions around individual client businesses, the study pointed out.

Processes outsourced have a strong correlation with the level of maturity of enterprise IT systems. Currently, due to low maturity in systems and processes, only low-end services can be outsourced. However, the entry of global logistics players like TNT and greater foreign investment in the transport sector is likely to infuse professional and world class management practices. Adoption of technology and professional management practices will help to sustain the growth of outsourcing in the long run. Service provider maturity is key to facilitating outsourcing growth.

Currently, there are very few service providers offering outsourcing services to the logistics sector. These service providers (VeeMove , Kale Consultants) primarily offer services like data entry for transactions such as purchase orders, invoice entry, etc. Outsourcing in logistics demands a close working relationship with the service providers and often directly working on internal IT platforms with dynamic exchange of data. Recently, TNT launched a service to provide improved solutions for the service logistics sector in South East Asia.